Signature Devices Inc. (SDVI)

[BeachBum]

The "E" in P/E ratio stands for earnings. The $5 mil is an (asset) investment into the development of a video game to be sold at a later date, not earnings from the sale of a game. ROI can only be calculated after earnings are realized post production through game sales, not before.

There are many expenses associated with game development, most of which are linked to program staffing imo. The game needs to travel from concept to reality which will eat into the $5 mil. The $5 mil is always there, just in different forms through stages and posted accordingly.

The $5 million moves around on a balance sheet as the project travels from idea to sell-able asset. Only upon completion of game and full use of investment required for completion has been depleted, can you calculate P/E ratio with multiplier. Unless the money is returning multiplier worthy profit, it is not earnings but only a fixed asset.

Also, multipliers are what investors are willing to pay over and above the earnings per share. It could be zero, it could be 50. It is a comparative figure only. The market defines the multiplier in any given stock or sector.

And that's all I have to say about that. I love money.

In my opinion of course.

DFW